Govt mulls 7pc transport fare hike


Jul 28, 2014-

The government is considering hiking public transport fares by around 7 percent. The new fares will be implemented for all public transport services, including buses, minibuses, microbuses, taxis and three-wheelers.

The government had last increased the fares in March last year by 9 percent. The Department of Transport Management and transport entrepreneurs are scheduled to meet next week to fix the new fare.

The Ministry of Physical Infrastructure and Transport said the transport department began preparations to raise the fares following intense pressure from transport entrepreneurs. The transporters had been pressuring the ministry for a fare hike ever since the government hiked fuel prices last year.

Tulsi Prasad Sitaula, secretary at the ministry, said the transport fares could be increased by a maximum of 7 percent. “An initial estimate of

the department shows the fares could be increased by five percent,” he said, adding, however, the increment could be slightly higher than 5 percent if adjusted with inflation.

Sitaula said the ministry has also directed the department to raise the fare based on the annual inflation rate. “There are multiple criteria to hike public transport fares, but this time it will either be based on the rise in petroleum prices or annual inflation rate,” he said.

As per the existing “scientific” mechanism, the hike in transport fares is determined based on 35 percent increase in fuel and 65 percent rise in non-fuel factors. Non-fuel components include bank interest rates, cost of spare parts, staff salary and administrative and maintenance costs.

According to an agreement between the government and transporters, the fares would be revised if fuel prices were increased by more than Rs 5 per litre.

Dol Nath Khanal, general secretary of the Federation of Nepalese Transport Entrepreneurs, said the new fare structure would come into effect within a week after the necessary procedures are completed.

“The fare hike is justifiable as there has been no hike for the last year. And, a 7 percent hike is reasonable given the increase in fuel prices,” said Khanal, adding as per the federation’s calculations, the fares would go up by 7 percent.

Earlier, the transporters had demanded the department increase the transport fares by more than 15 percent, citing the rise in the prices of fuel and spare parts. Petroleum prices were revised twice in the last year.

Published: 29-07-2014 09:22

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